The future of remote work: Key insights for people leaders

The world of work has undergone a seismic shift in the past few years, with remote work becoming a mainstay for many organizations. A recent report titled The Evolution of Working from Home, from the Stanford Institute for Economic Policy Research (SEIPR), provides valuable insights into the work-from-home (WFH) trend, offering a comprehensive look at remote work's past, present and future.

Remote work has been trending up for decades.

The SEIPR report traces the growth of remote work from the 1960s to the present day, showing us how remote work has grown exponentially over the decades — from 0.4% in 1965 to 25% in 2023. 

• Remote work has been increasing for decades, doubling roughly every 15 years.
• The COVID-19 pandemic accelerated the WFH trend, with more than 60% of days worked from home in May 2020.
• The share of days worked from home increased from about 5% in 2019 to 25% in 2023.
• Technological improvements, such as video-call software and cloud file-sharing, also drove the growth of remote work.

Demographics + education are critical factors in determining work location.

Demographic factors and education influence the likelihood and ability to work from home. Education, in particular, emerges as the most significant determinant, with college graduates working from home more than twice as much as workers with only a high school degree. Age, gender and the presence of children also play a role in shaping remote work patterns.

• Education: Employees with a high school degree or less spend 18% of their days working from home, while those with a graduate degree do so for 37% of their days. College and graduate degree holders tend to work in heavily computer-based occupations, which are more conducive to remote work.
• Gender: The average level of working from home in 2022 was 31.3% for women compared to 29.6% for men. However, the gender gap regarding desired days working from home is more prominent, with females wanting about 4% more days.
• Age: Employees in their 30s have the highest levels of working from home, partly due to more significant childcare requirements, while those in their 20s or over 50 come into work more often.
• Presence of children: Workers with children work from home about 3.7 percentage points more than those who do not live with children. This is likely due to remote work's flexibility and convenience in balancing professional responsibilities with childcare.

The 3 types of employees: Characteristics + challenges + productivity

SEIPR identifies three distinct groups of employees based on their working arrangements: entirely on-site employees, hybrid workers and fully remote workers. Each group has unique characteristics and challenges that people leaders must understand and address to ensure productivity and job satisfaction. Likewise, employees' productivity varies significantly based on their work arrangements, with distinct patterns observed among fully remote workers, hybrid workers and those who work entirely on-site.

Entirely on-site employees

Entirely on-site employees comprise about 60% of the workforce and are typically in front-line roles such as retail, food services, accommodation, travel, cleaning and security. These roles are challenging to perform remotely and require high in-person interaction. During the pandemic, these employees continued to work almost entirely in person, presenting unique health and safety challenges.

• On-site employees are the most numerous and are the lowest-paid segment on average.
• These employees work in roles that require a high level of in-person interaction.
• Health and safety measures are crucial for this group, especially during public health crises.

To boost productivity for on-site workers, leaders should:

• Explore ways to incorporate elements of remote work where possible, such as allowing for flexible scheduling or remote training sessions.
• Invest in technology and training to help these employees become more comfortable with digital tools, which could open up possibilities for remote work in the future.

Hybrid workers

Hybrid workers, representing nearly 30% of employees, typically work from home two or three days a week and commute to the office the rest of the week. These employees are generally in graduate and professional jobs, especially in larger companies' middle and senior management positions. The most common pattern within this group is working from the office Tuesday to Thursday, with Monday and Friday being remote work days.

Hybrid working, where employees split their time between home and the office, positively impacts productivity. First, hybrid workers save about two to three hours per week from less commuting, and some of that time goes into their current job. Second, hybrid workers appear more productive on home days because of fewer distractions and quieter home working conditions.

• Hybrid workers are the highest-paid group on average.
• They typically work from home two or three days a week and commute to business premises the rest of the week.
• Hybrid flexibility supports productivity.
• This group must balance remote and in-person work to maintain productivity and engagement.

To boost productivity for hybrid workers, leaders should:

• Provide resources and training to help hybrid workers manage their time and tasks effectively across different work environments.
• Ensure hybrid workers have the equipment and digital tools to work effectively at the office and from home.

Fully remote workers

Fully remote workers, who constitute just over 10% of employees, tend to work in roles that require limited interaction. These jobs are computer-based and often involve mostly individual tasks. 

Studies suggest that fully remote working can lower average productivity by around 10% to 20%. This decrease is attributed to challenges with remote communication, barriers to mentoring and on-the-job learning and issues with self-motivation. However, it's important to note that fully remote work also lowers other business costs, such as office space and potentially wages, if the business can access cheaper labor in farther off domestic and international locations.

• Fully remote workers make up just over 10% of the workforce.
• These roles are mostly computer-based and often require limited interaction.
• Productivity for fully remote workers is estimated at 10-20% lower than average productivity.
• Monitoring productivity and maintaining engagement can be a challenge for this group.

To boost productivity for remote workers, leaders should:

• Provide regular communication and feedback to help remote workers stay connected and engaged.
• Provide resources and training to help remote employees manage their time and tasks effectively and overcome challenges related to self-motivation and isolation.

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Numerous factors impact remote work propensity around the world.

SEIPR also provides an international perspective on remote work, highlighting the differences in remote work levels across various regions. Factors such as home size, lockdown severity and virus control measures played a role in these differences.

• In North America and Europe, workers do about two days of remote work per week on average, while in Asia, it's closer to one day per week.
• Countries with longer and stricter lockdowns have higher levels of working from home.
• The ability to accommodate a home office varies by region, which can impact the feasibility of remote work.

Charting the course for a diverse workforce in the future.

As we progress, people leaders must continue to adapt and evolve their strategies to meet the changing work landscape. Understanding the unique needs of employee segments is crucial to create an environment that supports all types of workers and ensures all employees are well-equipped to navigate the future of work. 

Education, age and the presence of children at home are significant factors influencing the ability to work from home, and these demographic nuances should be considered when designing policies and support systems. 

To enhance productivity, employers should:

• Explore ways to incorporate elements of remote work for on-site employees.
• Provide resources and training for hybrid workers to manage their time and tasks effectively across different work environments.
• Ensure regular communication and feedback for fully remote workers to help them stay connected and engaged.

As the trend of working from home continues to grow, fueled by technological advancements and changing norms, people leaders must stay ahead of the curve. By understanding and addressing the unique needs of each employee group, we can collectively foster a more inclusive, productive and resilient workforce ready to embrace the future of work.

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